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Palo Alto Networks (PANW) Dips More Than Broader Markets: What You Should Know

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Palo Alto Networks (PANW - Free Report) closed the most recent trading day at $512.32, moving -0.96% from the previous trading session. This move lagged the S&P 500's daily loss of 0.35%.

Coming into today, shares of the security software maker had gained 3.5% in the past month. In that same time, the Computer and Technology sector gained 8.33%, while the S&P 500 gained 7.11%.

PANW will be looking to display strength as it nears its next earnings release, which is expected to be November 18, 2021. The company is expected to report EPS of $1.57, down 3.09% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $1.2 billion, up 27.2% from the year-ago period.

PANW's full-year Zacks Consensus Estimates are calling for earnings of $7.24 per share and revenue of $5.31 billion. These results would represent year-over-year changes of +17.92% and +24.76%, respectively.

Investors should also note any recent changes to analyst estimates for PANW. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. PANW currently has a Zacks Rank of #2 (Buy).

Valuation is also important, so investors should note that PANW has a Forward P/E ratio of 71.48 right now. Its industry sports an average Forward P/E of 44.36, so we one might conclude that PANW is trading at a premium comparatively.

Investors should also note that PANW has a PEG ratio of 2.78 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Security industry currently had an average PEG ratio of 2.67 as of yesterday's close.

The Security industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 79, putting it in the top 32% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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